I liked the mp3 player point made previously... though the calculator one works too (but is a generation earlier).
I remember buying my first MP3 player... it wasn't too bad... 64MB of storage, fairly small... but I also came a few years after the first ones were arriving. It was also almost $200.
Now, while the multifunction iPod touch seems to be one of the best selling mp3 players, and smartphones are eating into the single function dedicated player market pretty well, there's still a healthy market for those little players with 2GB of storage... and they often can be found for under $10.
I personally can't wait until I can buy an ebook reader with a simple e-ink display (maybe even color e-ink!), some internal storage (a gig is enough), and a nice light but decent build quality for the price of a hardback book. There's no reason it can't happen and there's no reason they can't coexist with the tablets and multifunction readers... even if the market for them never takes off like tablets probably will.
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